High value in unpaid internships

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In the face of lawsuits alleging violations of minimum-wage laws, the magazine company Conde Nast ended its famed internship program last week. To many observers, it seems exploitative for the publisher of Vogue and other glitzy titles to pay young interns little or nothing — and inequitable when such opportunities are open only to students whose families can afford to support them.

Yet the Conde Nast case obscures a deeper problem: In a variety of industries, current students and recent graduates don’t yet have the skills and experience needed to contribute meaningfully to an employer’s success, and even entry-level paid positions attract an ample supply of well-qualified applicants. In these cases, internships are one tool for turning unskilled neophytes into able veterans who can better compete for full-time jobs.

Instead of ending unpaid internships, we should promote those that deliver real skills, and we must find ways — perhaps through student loans — to help less-privileged students take part in
certified skill-building internships.

Almost 13 percent of Americans ages 20 to 24 are unemployed.
To some degree, this reflects a skills deficit that other countries address far more directly than the United States does. Germany’s apprenticeship model has long provided practical skills to younger workers, and the unemployment rate for Germans age 20 to 24 is under 8 percent.

Under the US Fair Labor Standards Act, unpaid internships can avoid minimum wage rules only if interns learn skills “similar to training which would be given in an educational environment.” The training requirement is essential and could be strengthened. If interns are given mindless jobs that don’t expose them to new people or ideas, then their employer has reneged on a promise, and they have a right to sue. Public policy could do a better job of encouraging former interns to anonymously rate their former employers, and publicizing the results.

At the same time, it’s unrealistic to think individual private businesses will provide new skills to temporary, not-yet-qualified workers simply out of public benevolence. Throughout much of Western history, young apprentices paid to learn — either explicitly with cash or implicitly by working for little pay. James Watt, whose steam engine helped power the Industrial Revolution, learned instrument making by working as an unpaid apprentice for 10 hours a day. Indeed, Watt paid 20 guineas for that privilege.

Today, philanthropy can help. I oversee the Rappaport Institute’s Summer Fellows program, which places 12 graduate students annually in summer public-service internships in Greater Boston. The interns’ employers, such as the Boston mayor’s office, don’t pay wages, but the generosity of our donors, the Rappaport family, allows the students to receive $7,000 per summer.

Universities also have a role to play. Last year, Northeastern received over 47,000 applicants — more than Harvard. Northeastern’s transformation from YMCA offshoot to academic powerhouse reflects its appealing combination of serious academics with the school’s co-op program, where students learn by working.

Critics are right to worry that unpaid internships provide access only to students from wealthy families. One solution might be to expand federal student loan programs to cover students taking unpaid internships, whether or not they receive college credit for them, or even recent graduates. I would set a high bar for making internships eligible for such loans, by requiring official certification of their educational quality. With a loan program in place, more widespread unpaid internships could help move young Americans toward permanent employment.
Internships provide a pathway towards employment that should be encouraged — not penalized.

Edward L. Glaeser, a Harvard economist, is director of the Rappaport Institute for Greater Boston.

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